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The Premier’s Economic Recovery Team (PERT) report is fundamentally flawed and risks leading the province down a dangerous path, critics are warning.
Unless the report’s nature and its immediate failures are understood and challenged, Newfoundlanders and Labradorians could be corralled into a conversation about their own future that marginalizes certain perspectives, limits civic engagement, and compounds underlying issues at the root of the province’s devastated economy.
Drafted by London-based multi-millionaire and Newfoundland ex-pat Moya Greene, the 342-page report released May 6 lays out a proposed neoliberal overhaul of the province’s economy under the title of a “big reset.” Greene worked with a small team of government-appointees to devise a plan to address the province’s gross debt—which the report pegs at $47.3 billion.
“Not Appropriate and Not Fair”
The Greene Report proposes balanced budget legislation, a wage freeze for public sector workers, the privatization of public assets, the centralization of health authorities, increased resource extraction—including on Indigenous lands with no mention of Indigenous rights—continued oil and gas development, and deregulation of the fossil fuel and other sectors.
“It is surreal to have this very rich, titled person from England, who has made a luxurious living by taking away workers’ livelihoods through privatization schemes, beaming in from London to tell us that we caused this problem and now we have to endure tough love austerity,” Angela Carter, an associate professor of political science at the University of Waterloo who lives in Conception Bay, told The Independent. “I’m really shaken by this—it’s not appropriate and it’s not fair.”
Carter points out that as chief executive of the United Kingdom’s Royal Mail, Greene privatized the postal service and oversaw the elimination of thousands of jobs—all while making a combined £637,000 in salary and bonuses in 2010 alone. This is “more than four times the prime minister’s salary and 34-times the pay of the average postal worker,” according to a June 2011 article in The Guardian. By the time she stepped down as head of the postal service after eight years there, Greene had grossed a reported £12 million.
“This is a rich person’s view of what needs to be done,” says Carter, a member of the People’s Recovery NL coalition, which is working on its own policy paper to address the province’s convergent crises, including social and economic inequality and the climate emergency. “We don’t need to go in this direction at all, and we shouldn’t because it doesn’t speak to the broader interests of the people in Newfoundland and Labrador.”
Greene’s personal wealth aside, her adherence to a political and economic ideology that many now acknowledge has brought the globe to the brink of ecological collapse has Carter and others concerned.
“The Worst Possible Economic System Given the Crisis We’re Facing”
Neoliberalism “proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets and free trade,” writes David Harvey, professor of anthropology at City University of New York, in A Brief History of Neoliberalism.
In practice, neoliberal policies promote austerity, privatization, deregulation, tax cuts, strengthening corporate power, weakening unions and workers’ rights, and reducing the state’s role and influence in an economy. It is associated with more common terms like unfettered or free market capitalism, and trickle-down economics.
In a 2015 interview with The Independent, former trade unionist, journalist and the province’s first NDP leader Ed Finn said neoliberal capitalism “can only persist as long as there’s economic growth—but infinite economic growth on a finite planet is clearly not sustainable.”
Finn called neoliberalism “the worst possible economic system we could have, given the environmental crisis that we’re facing.”
Before he passed away late last year Finn had been sounding the alarm on neoliberalism for decades. He is now joined by a growing number of people, institutions and governments acknowledging neoliberalism’s fatal flaws. In 2019 Nobel Prize winner Joseph Stiglitz, a former chief economist at the World Bank, said “there is no magic bullet that can reverse the damage done by decades of neoliberalism,” but that it’s clear governments must maintain or strengthen their ability to regulate.
The Greene Report advocates for precisely the opposite when it comes to the most contentious and dangerous industry pushing the world to the precipice of irreversible global heating. “Governments can’t make quick decisions and are not competitive with other parts of the developed world that exploit oil and gas assets,” it reads. “The province must remove the red tape associated with development in all sectors.”
Greene proposes further hydroelectric development on the Churchill River in Labrador, in part to “green the economy” and power “low emission” expansion of offshore oil and gas, and mining.
“It is challenging to develop an economic growth pathway for Newfoundland and Labrador that does not include growth in the offshore petroleum sector,” the report says. “Other sectors can contribute to fiscal revenues, but there are no short-term, realistic scenarios to replace the petroleum royalty revenues necessary to provide public services as the province transitions to the green economy.”
Carter, author of the new book Fossilized: Environmental Policy in Canada’s Petro-Provinces, says the Greene Report is “trying to package up going all in on oil for the last little bits that we can as some kind of green transition”—which, she adds, “is just not credible.”
“It’s like we’re driving at top speed in the wrong direction, and we’re looking in the rearview mirror as we go. We are not on track to embrace opportunities of a truly green decarbonized economy. And that means the workers here are in peril, and so is our economy for the long term.”
Carter says that while there were some positive and “unexpected” recommendations in the report, like proposed wealth taxes, inheritance taxes, and taxes on second residences and luxury vehicle purchases, “the real thrust of the report is about cuts to health care, cuts to post-secondary education, cuts to public service jobs, and then floating these ideas of privatization—so selling off public assets, these one-time fire sales so that we can quickly pay down debt.”
In January, Newfoundland and Labrador Federation of Labour President Mary Shortall abruptly resigned from the PERT, citing a “lack of transparency, top-down approach, rushed timeline, lack of real collaboration and an overall feeling that not all perspectives were being considered, or appreciated.”
Now, Shortall says, the PERT has produced an “outdated response” to the province’s economic crisis. She says the PERT risks limiting public discussion and viable solutions by implicitly putting forward two options.
“One is to do exactly what they say, or fall off the fiscal cliff or hit the wall,” Shortall says. “I think that’s offensive to the people in Newfoundland and Labrador [who] understand way more than [the PERT] that we have fiscal challenges here. But they also understand that we have a crisis of unemployment, we have a crisis of poverty, we have a crisis of inequality.”
Shortall says the growing acknowledgement of neoliberalism’s failures and economic hardships aggravated by the COVID-19 pandemic have forced governments around the world to “look at different economic models as part of their ‘building back better’ approaches.” She wishes the province would do the same, but says in selecting Greene to lead the PERT the Liberals had specific goals in mind from the outset.
“They always use this same axe to try and push their way out of a hole,” she says. “And if they didn’t want the axe to be what’s going to get them out of the hole, they probably wouldn’t have asked Moya Greene to chair this and give her ownership of the writing and the content of the report. When you bring in someone who always holds an axe, I guess that’s what we can expect. But there are alternatives.”
Big Reset, Big Blind Spots
While many are focused on what’s in the report, others are just as concerned about what’s not.
St. John’s Status of Women Council Executive Director Laura Winters says her organization has been lobbying the province to consider “a feminist economic recovery model, and at least applying a gender-based analysis” to the PERT’s work. Though the report acknowledges a gender wage gap “still exists” and “must be eliminated,” it stops short of making informed recommendations.
In a written statement, Minister Responsible for Women and Gender Equality Pam Parsons says the government will “undertake a detailed review” of the report “with the same GBA+ lens we would use for policies, programs, services, and other initiatives considered by government.” Parsons also reiterates that “residents, community groups, businesses and other stakeholders will also have opportunity to provide input before any action is taken by government.”
But Winters says the PERT “really needed to consider the economic circumstances of women and people of other marginalized genders from the outset of this work to be able to develop recommendations that could address that issue.”
Sobia Shaikh of Anti-Racism Coalition Newfoundland and Labrador (ARC-NL) shares similar concerns of the lack of an anti-racism lens on the PERT’s analysis and its policy proposals. She says given the lack of public consultations, ARC-NL was “not surprised” the report “does little but lip service to addressing racism, discrimination and inequity.”
Shaikh says the report’s proposals, if implemented, would hurt migrant workers and racialized people and “increase their vulnerability to racism, not reduce it.”
An assistant professor in MUN’s school of social work, Shaikh teaches social welfare policy. She echoes Winters’ comment that a lens cannot be retroactively applied to policy recommendations. “These ideas of policy lenses make sense at the beginning, before policy is made. Not after the fact.”
Kerri Neil, a member of the Social Justice Co-op NL, says she wasn’t surprised by the report’s approach. “We’ve seen the ways that our government has been really pushing neoliberal capitalism on us for decades now: privatization and really violent resource extraction,” she says, citing the development of Muskrat Falls and the criminalization of Indigenous people who resisted the damming of the Churchill River—also known in Labrador as the Grand River.
“We were really upset to hear the discussion about the way the Grand River is underdeveloped. We’re really concerned about Gull Island,” Neil says. “We’ve already seen the devastating impacts that Churchill Falls and Muskrat Falls has had on the Grand River, and how violent the construction of Muskrat Falls was. And to say that we need to develop that river further is very concerning and something that we definitely need to resist.”
The Independent invited comment on the report from Innu and Inuit governments but did not receive responses by the time of publication.
“Our province, for a very long time, has been run by these corporate elites,” says Neil. “And right now they’re wearing the NL Liberal flag, and they’ve hand-picked their friends to write this report and really represent their best interests as white settlers who want to get rich off this land, put profit over people, and pollute it so that they can […] enjoy a standard of living that is unattainable to so many people—and that’s really based on taking land from Indigenous people.”
Austerity Breeds Fear and Distrust
Shaikh warns that an austerity approach to the province’s economic crisis will “pit people against each other in ways that I don’t think we’re aware of yet.” She says austerity “breeds more distrust and mistrust and fear amongst people,” leading to an increase in racism.
According to UK-based Psychologists for Social Change, austerity policies “have damaging psychological costs” that are in part the result of “fear and distrust.” In a 2015 briefing paper the group says “there is clear and robust research linking recent austerity policies with damaging psychological outcomes.” They cite research that indicates “higher levels of mental health problems following austerity, with a rise in antidepressant prescriptions, and [doctors] reporting increasing numbers of mental health appointments, and a rise in male suicides.”
Shaikh says austerity’s known causal relationship with increased inequality means that, if implemented, the Greene Report’s policies would compound “racialized hierarchies, gendered hierarchies” in the province, including Indigenous peoples and migrants.
“All those inequities are going to be made worse by neoliberal logics,” she says.
Robin Whitaker, an associate professor of anthropology at MUN (and a board member of The Independent), says it will be important to “counter any kind of politics of resentment, which I think this report implicitly risks encouraging in the way that it contrasts public sector workers and private sector workers.”
The report notes that “the compensation and benefits paid to many public sector employees are higher than those received by some doing similar jobs in the private sector workforce who must contribute to public sector benefits through their taxes.”
Whitaker, a member of the People’s Recovery coalition, says “comparing people with decent jobs with decent pay and a decent amount of security or benefits, with people who don’t have those,” risks leading some workers to believe other workers are overcompensated, when it’s often the case that private sector workers are underpaid and afforded inadequate benefits or none at all.
The Greene Report also suggests that government reduce operating grants to the province’s two major post-secondary institutions—Memorial University (MUN) and College of the North Atlantic—by 30 percent over six years, while at the same time increasing MUN’s autonomy in setting tuition fees. The move, Whitaker says, is a “pretty classical kind of neoliberal manoeuvre to download responsibility for managing unmanageable budget challenges onto units that are then forced to do things that create further harms, or that are just simply impossible.”
Whitaker says that “on one hand the university is then forced to make these decisions about where it gets funding—it starts to look for marketized kinds of solutions—but also effectively downloads debt onto students.”
Taking Back Control
Whitaker says some of the PERT’s ideas “are so ridiculous and are really going to do harm that we shouldn’t even really be talking about them,” and in the weeks and months to come it’s “really important that we don’t let them set the terms of the debate or discussion as we think about how we want to become a fairer and more just province and society.”
“I think that’s the real risk of these things—that those who set the questions have a lot of control over the parameters of discussion—and we really have to find ways of resisting that narrow problem-setting that we risk being faced with right now.”
Neil says given the province’s state of affairs some may feel hopeless. “So many people talk about moving away, like there’s nothing we can do to resist,” she says. “And I think that’s not true. We can come together and we can build a better world. I hope these moments of crises really encourage people to get involved in their communities, because I think that is a really important first step.”
The Social Justice Co-op has been developing ideas around a Green New Deal for Newfoundland and Labrador. Meanwhile, the People’s Recovery is set to release its own policy document in the coming weeks to present alternative ideas developed through collaboration among people, organizations and interests not represented on the PERT.
In March, The Independent asked Furey if he would consider the People’s Recovery recommendations in government decision-making processes where the Greene Report is considered.
“As we have always said, we welcome engagement from all perspectives. That applies to this group as well,” the premier said in an emailed response. He said that following the Greene Report’s release the government will seek public input and “consult broadly on any selected recommendations prior to implementation.”
On May 5, the day before the report’s release, Finance Minister Siobhan Coady announced that the public will be invited to weigh in through virtual town halls, the government’s online portal, or by phone.
Winters says the government went “very narrow in scope by bringing a really specific group together to do this work behind closed doors without transparency.” She says they would have “done better if Furey had come out of the gate saying, I want the brightest minds in the province bringing creative solutions.” The People’s Recovery has to an extent filled that void, she says, “as a space where alternative ideas can be put forward.”
Carter, who co-founded the People’s Recovery, said an “innovative” PERT report “would have been a real job creation strategy for people. It would have been confronting inequality and getting to the heart of terrible levels of inequality and unemployment and underemployment in this province.”
Whitaker says the Greene Report necessitates “collective responses and collective action” from the people of the province. “I think we’ll have to demonstrate that there is a collective will to look after each other, and to imagine a better kind of society we want.”
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